Why the demand curve of an 'Industry' under perfect competition is downward sloping?
Dear student,
The demand curve of a firm under perfect competition is horizontal line equal to Price, as firm in perfect competition is a price taker.
The demand curve of an industry under perfect competition is downward sloping because the market price is determined by the forces of market demand and supply. An individual firm has no power to influence price. It follows the law of demand, which states that the quantity demanded increases with a decrease in price and vice versa.
Regards
The demand curve of a firm under perfect competition is horizontal line equal to Price, as firm in perfect competition is a price taker.
The demand curve of an industry under perfect competition is downward sloping because the market price is determined by the forces of market demand and supply. An individual firm has no power to influence price. It follows the law of demand, which states that the quantity demanded increases with a decrease in price and vice versa.
Regards